US President Donald Trump's crusade against America's trade deficit has instead sent it soaring to record highs! His aggressive trade moves backfired, creating bigger problems that now require quick solutions.
According to the US Bureau of Economic Analysis, the US trade deficit surged by 44.3% in the first quarter of 2025, hitting a staggering $450.2 billion. This pushed the deficit to 6% of GDP, its highest level since the third quarter of 2006. For context, the deficit stood at 4.2% of GDP in the fourth quarter of 2024.
The primary driver appears to be Trump’s return to the presidency. The head of the Write House had vowed to slash the trade gap, but his weapon of choice—slapping steep tariffs on multiple trading partners—had the opposite effect.
In response, US companies rushed to import foreign goods, stockpiling inventory to hedge against tariff volatility. According to economists, Trump’s tariff policies could have long-term consequences. His duties were far steeper than markets anticipated, and their abrupt suspension only fueled chaos, undermining the dollar’s status as a safe-haven asset.
